Chainlink price pops higher as equities rally, but what about the broader picture?

Chainlink (LINK) price action had bulls popping champagne on Friday with nearly 13% intraday gains in the books, making it one of the best trading days for 2022. Unfortunately, the weekend hangover  came in hard as price action in Chainlink quickly reversed as profits were booked. A cold shower came for investors as China is not letting go of its zero-covid policy, which is putting pressure on the supply chain and global economy.

LINK price can pop all it wants but is going nowhere

Chainlink might have broken above the 200-day Simple Moving Average (SMA), a very bullish signal, but that is as far as that idea goes. The bullish sprints are not supported by the current global macro backdrop, which is far from rosy. With big tail risks still present on possible nuclear strikes in Ukraine, a rocket hitting South Korea or Japan, and the Fed still hiking interest rates to trigger a forced and controlled recession, reasons abound for bearish pressure on the price action.

LINK price thus has room to move higher little by little but remains chained as a dog to its kennel. It looks like price action is going sideways to lower between the $9 and $6 price range. Expect to see some investor disappointment later this week as the US inflation numbers could point to another new high against the current odds. 

That puts LINK price action near $7.50 with the 55-day SMA and the 200-day SMA intersecting with the monthly pivot, making it a crucial level from now on.

LINK/USD daily chart

To the upside, look for relief on that same inflation number on Thursday. Should inflation drop massively lower from its 40-year-high, expect big market shocks, with equities rallying sharply higher and pulling cryptocurrencies alongside them. LINK price action would target $9.50 at the monthly R2 resistance level.